Meeting_Body
EXECUTIVE MANAGEMENT COMMITTEE
MAY 18, 2017
Subject/Action
SUBJECT: LEASE OF INDUSTRIAL PROPERTY TO CALIFORNIA DROP FORGE, INC.
ACTION: APPROVAL OF 5-YEAR LEASE AGREEMENT
Heading
RECOMMENDATION
Title
AUTHORIZE the Chief Executive Officer to execute a five-year lease agreement (Lease Agreement) for the property located at 203 E. College Street, Los Angeles (Property, APN# 5409-014-906) with California Drop Forge, Inc. (Lessee) in the amount of $7,890.84 monthly with an annual increase of four percent.
Issue
ISSUE
Lessee and Metro desire to enter into a new lease that will replace and supersede all prior agreements and understandings between the parties. The existing lease, with a current rent of $2,904 monthly, expired at which time the agreement reverted to a month-to-month tenancy and the new rent of $7,890.84 was put in place during the negotiation.
Discussion
DISCUSSION
On June 9, 1970, Fansteel, Inc. entered into a lease for the then vacant Property with lessor, Catellus, Inc., Metro's predecessor in interest. Over the interceding years, Fansteel and Catellus amended and supplemented their lease. Fansteel constructed certain improvements to the Property, including without limitation, a building, parking lot and fencing (Existing Improvements). After Fansteel declared bankruptcy in November 2003, California Drop Forge was assigned the existing lease in bankruptcy proceedings, thereby assuming the lease obligations of Fansteel. California Drop Forge has been using the Property and Existing Improvements since then.
The Property is used to support the foundry next door and is located adjacent to the Los Angeles Union Station rail yard. The Property was included in Metro's purchase of Union Station from Catellus, Inc. It consists of approximately 21,919 square feet of land, improved with a metal industrial building containing approximately 5,200 square feet and fully enclosed by fencing. (See Attachment A)
Findings and Conside...
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